This is a R21 application in response to PA 02-100 "Complex Formation in Hormonal Regulation of Gene Expression." The TGF-beta superfamily of ligands signal through receptor serine-threonine kinases that transmit their signal downstream using translocatable transcription factors called Smads. In the nucleus, Smads associate with DNA-binding proteins and transcriptional co-factors to regulate target gene expression. Loss of TGF-beta and BMP signaling have important implications for cancer, as several human cancers have been shown to have lost TGF-beta signaling capability during their development, and mutation of a receptor for BMPs has been shown in at least one hereditary cancer syndrome. It has lately become apparent that a significant component of transcriptional regulation of target genes is repression and that loss of repression is harmful to normal development and homeostasis. We have identified association of BMP regulated Smad proteins with histone methyltransferases of the Suv family. These proteins methylate histone H3 on lysine 9 and cause transcriptional repression or silencing. In the mouse, loss of Suv proteins is associated with the spontaneous development of B-cell lymphoma. The association of Smads with Suv thus provides a mechanism for transcriptional silencing of genes regulated by TGF-beta signaling pathways that may be important in cancer. In this proposal, we will further characterize the interaction of Smad proteins with Suv at both the biochemical and functional level. In Specific Aim 1 we will determine the molecular details of the interaction of Suv and Smad proteins using SuvH1 and Smadl as prototypes. We will map the interaction domains on each protein and determine if likely transcriptional partners are present in the repression complex. In Specific Aim 2 we will characterize the functional significance of the interaction using reporter gene assays of a promoter known to be repressed by BMP signaling. We will also determine the cis elements involved in specifying transcriptional repression and determine if Smads and Suv proteins interact on DNA using chromatin immunoprecipitation and other assays. These studies will provide the foundation into further analysis of the mechanism of Suv-Smad interaction in transcriptional silencing.